Question

As a new entrepreneur, anthony's magic number for 2013 is $42,000. if the current tax rate for his business is 30 percent, calculate the amount that anthony's firm would need to sell for him to get his magic number.

Answer 1

Assuming that everything Anthony sells is profit and subject to tax; Anthony will need to sell $60,000. Since he will lose $16,000 (30%) to tax, he will be at his magic number of $42,000.